Have always been confused about when to include other liabilities aside from the obvious ones (i.e., term loan, senior note, etc) in calculating Enterprise value. For example, a company I am looking at has Lease financing obligations and Royalty financing obligations. Should these be included in my total debt calculation when solving for TEV? Is there a good rule of thumb to follow?
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Regarding leases, It used to be just financing leases, but recently started including operating leases as well due to some accounting standard change. Can anyone provide color on that?
Bump
It can depend on the analysis. For interview questions just note that one could also argue to include lease obligations. If doing this for actual work, just include what seems necessary based on context and footnote it. Since the addition of leases to the balance sheet, they are often times being included as debt in M&A, but also worth noting that in certain cases such as restructuring, it would be quite important to make the distinction very clear
God damn boy just use logic. Whatever is like debt include it
Great explanation here:
https://www.wallstreetoasis.com/forum/investment-banking/what-counts-as…
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